By Blanche Evans
The mortgage process today is too complex, takes too much documentation, and is too much of a hassle for consumers, declares E-LOAN's president and COO Joe Kennedy. So E-LOAN
and Freddie Mac
, financier of one of six homes in America, are taking the first big step in streamlining the armchair loan process.
E-LOAN is launching a new online mortgage application process that the company developed with technology integration support from Freddie Mac's Loan Prospector®, an underwriting tool set. The new process offers borrowers instant loan approvals online, along with customized rates and real-time rate locks over the Internet.
"To the best of my knowledge, no other entity has this degree of integration with Freddie Mac," says Kennedy, "and that is quite a compliment to us.
"We have arrived at the be-all and end-all of mortgage origination. This couldn't be achieved before, but with instant feedback and an instant rate quote, we have done a lot to reduce the documentation required.
The new application process is being piloted as one of several online lending options for customers of Baldwin Real Estate Services, a real estate and mortgage brokerage headquartered in Arcadia, CA. Mortgage loan applicants can apply online with the help of their Baldwin financial services representative using a special web site that is password-secured. After completing a streamlined application, qualified borrowers receive customized rate quotes and an immediate secure loan approval. They can lock their loan online in only a matter of minutes.
The E-LOAN loan process could have far-reaching effects in the loan industry with its potential to expand the levels of "paper" currently being offered by lenders. Lenders typically categorize loans into "A", "B," or "C paper" based on the borrower's credit profiles. The new technology, assures Kennedy, will encourage lenders to broaden the paper categories into a continuum of plus and double plus columns. For example, a borrower may fall short in qualifying for an A-paper loan, but may well qualify for a "B+." This borrower may qualify for a better rate than a "B paper" customer. With loans more accurately customized for each borrower, consumers should be enabled to get the best possible rate for their credit situation.
Both Freddie Mac and E-LOAN have learned from the process, says Kennedy. "We each learned some things that are unique about how to do this, and we'll see where we go from here."
Republication or redistribution of Realty Times content is expressly prohibited without the prior written consent of Realty Times . Realty Times shall not be liable for any errors or delays in the content or for any actions taken in reliance thereon.
© Copyright 2000 by Realty Times. All Rights Reserved.